COMMENT ON BELL ARTICLE

Bob Litan

Abstract

Almost by definition, all disruptive technologies or innovations threaten vested interests. If markets and the legal environment are sufficiently flexible – and in the United States, for the most they are – innovations that buyers want diffuse throughout the economy despite the opposition.

There are cases, however, where the existing order uses the legal system to fight back, to forestall or delay change. Napster is a case in point: it threatened the established recording industry, which eventually persuaded the courts to shut down that particular form of peer-to-peer file transfer. But even in this case, “the law” has failed to stop innovation. Other peer-to-peer networks have found ways to legally permit free Internet-based file transfers, while some companies – notably Apple – have developed business models around paid file transfer